Black Coffee: Easter Jellin’ with Ms. Yellen

Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance.

Happy Easter, everyone!

I tell ya, I’m still feeling the impacts of my recent blog crash and the ensuing rebirth. It’s kind of like waking up with a big hangover: The blog is standing on it’s own two feet, but it’s not fully functional. Yet.

So how far along am I in the recovery effort?

Well, while I’ve managed to recover most of my lost articles — a big thank you to Dr. Tom from Oral Answers, and Scott C. for all of your help! — I still have some niggling issues that may take awhile to fix. For example, some of my older posts have strange characters sprinkled within them. I need to figure out what’s causing that issue and how to fix it.

Ironically, the biggest issue is actually this: I ended up losing all of my email from the past five years — more than 13,000 messages, including all of my reader mail and notes from other bloggers. Everything. It’s all gone. My email contacts: annihilated. Filed messages that contained important reference material I relied on to run my blog: vaporized.

But please don’t cry for me — I’m going to recover! It’s just going to take a little time, that’s all.

On a bright note, the articles are flowing once again, and I’m now starting the preliminary work on the blog’s redesign. Keep your suggestions coming on what you like and don’t like about my current set-up.

Okay, onward and upward!

Credits and Debits

Credit: I see the number of applications for admission to Colorado colleges is up an incredible 30% this year. Officials insist that it has absolutely nothing — NOTHING! — to do with Colorado’s decision to decriminalize marijuana. Of course, it doesn’t.

Credit: I wonder if Fed Chairman Janet Yellen is smokin’ something. She insists that the US inflation rate is running at about 1% annually. Of course, it is. I know that’s true because the mainstream media continues to tell me that inflation is not just low, it’s “very, very, low.”

Debit: In fact, last week the Fed Chair was telling everyone that inflation isso low that “persistently low prices” are now the biggest threat to the US economy. Really?

Debit: Ms. Yellen must have forgotten to look at her electricity bill last month. The average US price for a kilowatt-hour surged more than 13 cents in March; that’s an all-time record for the month.

Debit: I bet Ms. Yellen’s chauffeur knows that gasoline prices are increasing more than 1% annually. In the US, the average price for a gallon of regular unleaded is now $3.66. That’s 14 cents more than it was during the same time last year.

Debit: Meanwhile, people like me who are living in California can only wish we were so lucky. The average price for a gallon of gas in Los Angeles is currently $4.30. At my neighborhood station last Tuesday, the price climbed 18 cents in a single day — from $4.11 to $4.29.

Debit: I was going to fill up my tank on Monday, but at the last minute I decided to wait another day. Hey … it seemed like a good idea at the time.

Debit: Meanwhile, beef, pork, eggs and shrimp are reaching higher prices on an almost-daily basis now too. In March, shrimp prices were 61% higher than a year earlier. And the price of ground beef is up 56% since 2010. Nope, no inflation there.

Credit: If you think beef prices are high now, just imagine how high they’re going to be after the EPA finally begins regulating cow flatulence. Don’t laugh, the White House is working to make it happen — despite the fact that methane emissions have been falling since 1990. I know.

Debit: How would government mandates on cow farts affect the price of beef? It’s Econ 101: As the Examiner notes, a 25% reduction in cattle methane emissions would require farmers to reduce their livestock herds by 25%. Lower supply, higher prices.

Debit: Here’s a sobering thought: Within one generation, the US will be spending all of its tax money on just Medicare, Medicaid, Obamacare, Social Security and interest on the debt. Of course, that assumes interest rates remain artificially low. Otherwise, it will be much sooner. Uh oh.

Debit: More bad news: If the economy ever really takes off, it will become impossible to maintain low rates — which will increase those interest payments on the debt to unacceptable levels. Why else do you think the Fed continues to pretend that inflation is low?

Credit: The math doesn’t lie — barring a radical change in government spending, the US is now far too deep in debt to save itself from bankruptcy.

Debit: By the way, you can blame some price increases on things like weather or bugs — but not everything. The truth is, the world is now rapidly losing confidence in our ability to live within our means. As a result, the US dollar is dying — and its loss of purchasing power is a symptom of that.

Credit: Remember, looking back, we’ll see that the US dollar’s day of reckoning came slowly — and then all at once. Hedge accordingly.

Credit: Did you see this? Supreme Court Justice Antonin Scalia told a group of law school students this week that they should consider a revolt if they think taxes are too high. No, really. Clearly, he’s not part of the 37% of Americans who now fear the federal government.

Credit: Scalia also wisely reminded those budding lawyers that the US Constitution is NOTa living-breathing document. He’s absolutely right. Unfortunately, the absurd “flexible Constitution” meme has been taught at most public schools for years now. My kids know better.

Credit: Said Scalia: “The Constitution is not a living organism for Pete’s sake. It’s a law. It means what it meant when it was adopted.” If every past and present US politician believed that, you can bet the Republic wouldn’t be in the tenuous financial position it finds itself in today.

By the Numbers

Are Americans finally beginning to see the federal government as being too big for its britches? Here are some recent poll numbers that shed a little light on the question:

71% Americans who believe that the Founding Fathers would view today’s federal government as being too big.

19% Americans who trust the government to do the right thing most or all of the time.

67% Americans who see the federal government as a special interest group.

54% Americans who now see the federal government more as a threat to individual liberty, rather than a protector.

More than 300 people participated in this survey. The good news: three out of four Len Penzo dot Com readers have good to excellent credit scores. The bad: almost one in ten folks aren’t really sure what their score is. If you’re in that group, there is no excuse for not knowing it.

Every week I feature the most interesting question or comment — assuming I get one, that is. And folks who are lucky enough to have the only question in the mailbag get their letter highlighted here whether it’s interesting or not! You can reach me at: Len@LenPenzo.com

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